EU Investment Law and Arbitration

The Provisional Application of CETA is Coming Close

by Nikos Lavranos, Secretary General of EFILA

The anti-CETA/TTIP campaign is reaching its climax.

After the anti-ISDS NGOs have managed to bring the TTIP-negotiations to halt – at least it has now been officially admitted that the negotiations cannot be concluded in 2016 and it remains unclear whether, and if so, how long the negotiations under the new US President will be under way.

The attention has now turned to CETA, in particular the – finally – scheduled signature of it on 27 October 2016 between the EU and Canada, which would entail the immediate provisional application of most parts of CETA, i.e., the trade, services, customs, rules of origin chapters, which fall under the exclusive competence of the EU.

Since the European Commission accepted that CETA is to be ratified as a mixed agreement, the anti-CETA groups have been focusing their efforts to stop CETA in some of the Member States, in particular Germany, the Netherlands and Austria.

On 12 October 2016, the Dutch Parliament approved the provisional application of CETA. So, the anti-CETA groups lost in that Member States.

On 13 October 2016, the German Constitutional Court rejected their injunction in their entirety. Accordingly, the German Government is free to agree to the provisional application of those chapters, which clearly fall into the exclusive competence of the EU. Of course, it remains to be seen how the Court will decide on the merits. This decision will be interesting in the light of the CJEU’s Opinion on the EU-Singapore FTA, which revolves around the question whether, and if so, to what extent, this agreement is a mixed agreement.

But let us not forget the European Parliament (EP). Much to the dismay of many of the MEPs, the Legal Service of the MEP recently concluded that there are no legal obstacles for agreeing to CETA. It remains to be seen whether the necessary majority for a “yes” vote will be found in the EP, that is, Article 218 TFEU requires the “consent” of the EP.

In short, the final fate of CETA is still unclear and will remain so for some time. Nonetheless, the green lights by the Netherlands and in particular Germany for the provisional application of CETA are important signals, which should persuade the doubters in other Member States.

Of course, Canada is not the US, so if CETA finally would enter into force in its entirety (after it has been ratified by all Member States – maybe not by the UK anymore), this could help giving TTIP a positive boost it so desperately needs.

But that will depend on the outcome of a whole series of elections, not only in the US, but also in France, Germany and the Netherlands.

Meanwhile, the time should be used to remind policy makers and the general public of the overall huge benefits of trade and investment agreements for all.

NOTICE:

Register for the 2nd EFILA Annual Lecture to be delivered by Johnny Veeder, QC, with the timely title:

“The Phoenix to emerge from the ashes of TTIP and CETA: an international appellate court for investment disputes in Europe …”